If a consumer's purchases of a product increases as income increases, this good is classified as a(n):
a. superior good.
b. inferior good.
c. substitute good.
d. complementary good.
e. normal good.
e
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A leftward shift of the demand curve results in: a. increase in equilibrium price
b. increase in quantity. c. decrease in both equilibrium price and quantity. d. decrease in quantity and an indeterminate equilibrium price.
Say a firm that sells its product at a price of $40 is using 20 units of capital. If the marginal product of the last unit of capital used was 50, and the constant rental rate of capital is $2,000, then this firm should
A. continue to use same units of capital. B. acquire more capital. C. decrease its output. D. decrease the amount of capital.
Government failure will likely arise if
A. Government officials attempt to maximize their own utility. B. There are no valuation problems. C. The free-rider problem occurs. D. Public services have reliable market prices.
Exhibit 9-4 Demand and cost curves for a monopolist
?
As shown in Exhibit 9-4, in order to maximize its profit (or minimize its loss), how much output should the monopoly produce?
A. 2 units per hour. B. 4 units per hour. C. 6 units per hour. D. 8 units per hour.